ADDIS ABABA – DJIBOUTI STANDARD GAUGE RAILWAY PROJECT

ES

MAY 2, 2012

1

Topics of Discussion2

1. Background Information

2. Development of A.A – Djibouti New Standard Gauge Railway Line

3. Techno-Economic Feasibility Study

4. Conclusion

1. Background3

A) Socio-Economic Conditions

Ethiopia Area: about 1 million square kilometer Population: 74 million (2007 Census); 80 million in 2011

Addis Ababa (capital city)

Population: 2.74 Million (2007)cover 32.27% all cities populationannual growth rate 2.1%

Growing City : size of 540 sq. km About 110 Embassies/Consulates Head Quarters of AU and UNECA

Djibouti

Border countries: Eritrea 109 km, Ethiopia 349 km,

Somalia 58 km

Area: 23,200 square kilometer

Population: 774,389 with a growth rate of 2.285% (2012 Census)

Capital: Djibouti

Two-third of the population of the country live in the

capital city

4

Background continued

The Economy of the two countries (Ethiopia and Djibouti) is highly integrated and is at the stage of convergence

Various Preferential & Bilateral Agreements

Closely work at different levels

The Heads of State and Government

Joint Ministerial Commission Joint Border Administration Technical Committees

Members of IGAD, COMESA

5

Background continued

Background continued

6

B) Transport and other infrastructureNo Paramet

erUnit of

MeasurePrior to 1991

Cumulative 2010

2011 – 2015

1 Road km 26,050(FRA + RRA)

48,800(FRA + RRA)

64,500 (FRA + RRA)

71,523 (URARP)

2 Railway km About 800 (old meter

gauge)

Preparation for

standard gauge

2,395 (new standard gauge)

3 Power MW <800 2,000 10,000 including Millennium

Dam)

4 Import mill T/yr

< 1 reached 8.7

estimated 10in 2015

5 Export mill T/yr

<< 1 reached

0.98

Estimated 3 in 2015

Note: FRA = Federal Roads Authority; RRA = Regional Roads Authority, URAR P= Universal Rural Access Road Project; FRA and RRA are Asphalt and Gravel while URAR P is all weather rural road

Background continued

7

C) History of Railway in Ethiopia and Djibouti

Railway service began before 100 yrs (1915)

The Legacy Railway is 1,000 mm gauge with diesel traction

It is owned and administered by the governments of Djibouti and Ethiopia (Bi-lateral ownership and operation)

It stretches from Addis Ababa – Djibouti (about 780 km: 680 in Ethiopia and 100 in Djibouti

Background continued

8

One Meter gauges were very popular in East African Countries (Kenya, Uganda, Tanzania )

In all of these countries, all suffer from old-age, lack of spares, technology obsolescence

High operating cost, worn out track, too old Locomotives, low capacity (12 -16 Ton/Axle)

Intermittent service only in few one segment (Dire Dawa to Port of Djibouti – 459 km)

A legacy system and historical tie of sisterly countries

Ethiopian National Railway Network9

Background continued

10

G) Railway Development Approach

Two Phases of development• 1st Phase/GTP (2010/11- 2014/15) about 2,395 km• 2nd Phase (2015/16 – 2020/21) about 2,665 km

Deploy multiple Lots in parallel

National Railway Network Characteristics Standard Gauge (1,435 mm) Electric Traction High Capacity (22 - 25 Ton/axle) Moderate Speed (120- 160 km/hr for passenger and 120 km/hr for

freight) Concrete Sleeper (160cm x20.5cmx22cm)

11

Development of A.A – Djibouti continued

12

b) Consultation: Bilateral (with Republic of Djibouti)

Signed MoU on June 10, 2010 “The Development and Operation of Standard Gauge Railway Line between Ethiopia and Djibouti”

Follow-up meetings and work visits by Ministers

Establishment of technical working group

Technical experts experience sharing Submission of draft Bilateral agreement on

“The Development and Operation of a Standard Gauge Railway Network” by FDRE to the RoD

Development of A.A – Djibouti continued

13

c) Consultation with EPC/Turnkey Contractors Construction contract for Addis Ababa –

Mieso Signed on October 25, 2011 Construction contract for Mieso – Dawanle

(border of Ethiopia with Djibouti) signed December 16, 2011.

Construction Contract Project from Ethiopian border to the Port of Djibouti has signed

Development of A.A – Djibouti continued

14

Techno-Economic Feasibility Continued

CargoType

09/10Base yr

10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20

Export 791 894 978 1262 1597 1824 2084 2221 2370 2535 2631

Import

Dry 5256 5529 5261 5704 6189 6721 7304 7944 8646 9416 9597

Fuel 2880 3148 3452 3790 4114 4471 4862 5293 5767 6344 6401

Total 8927 9571 9691 10756 11900 13016 14250 15458 16783 18295 18629

3.3 Transport Demand Forecast - Volume

15

3.3 Transport Demand Forecast - Volume

CargoType

09/10Base yr

20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28

Export 791 2920 3241 3598 3994 4433 4920 5462 6063

Import

Dry 5256 10653 11825 13125 14569 16172 17950 19925 22117

Fuel 2880 7106 7887 8754.7 9718 10787 11973 13290 14752

Total 8927 20678 22953 25478 28280 31391 34844 38677 42932

Techno-Economic Feasibility Continued

3.4 Project Financing and Cost Estimate Financing

o 15% Equity and 85% loan Cost Estimate

16

Techno-Economic Feasibility Continued

Investment Costs (million USD Equivalent)

Cost Category EquityFinancing

Debt FinancingTotal (USD)

Railway Works * 535.1 3,032.29 3,567.4 Telecom Supply ** 4.4 0.0 4.4Power Supply ** 62.2 0.0 62.2Right-of-way 29.5 0.0 29.5

ESIA 7.6 0.0 7.6

Rolling stock 0.0 366.2 366.2

Total 638.9 3,398.5 4,037.4

5. Conclusion

The project has great socio economic significance or the Peoples and Governments of Ethiopia and Djibouti

The Corridor has sub-regional, regional and continental importance

The Project is Socially Acceptable; Technically Feasible; Economically Viable Environment Friendly

17

Thank You

18